The Risk of Leaving Assets Directly to a Minor

For many parents, estate planning has a clear purpose: ensuring their children’s needs are met in the future. However, when it comes to passing on assets, the method of transfer is just as important as the value of what you leave behind.

Why Leaving Assets to a Minor Can Create Problems

While leaving money or assets directly to a child under 18 might seem simple, it often results in an unexpected, complex legal process.

Suppose a minor is designated as a beneficiary in a will, life insurance policy, or retirement account. In that case, the court must appoint a guardian to oversee those assets until the child reaches adulthood. This process can be time-consuming, lead to additional legal costs, and potentially put crucial decisions about your child’s financial future in the hands of someone outside your family, possibly even a court-appointed stranger.

Court Oversight and Its Consequences

After a guardian is appointed, every financial move involving your child’s inheritance must be reported to the court. This oversight can reduce flexibility and slow access to funds needed for essential expenses, such as education or healthcare.

What’s more, when your child turns 18, the entire inheritance is usually handed over in one lump sum. Without proper guidance or life experience, this sudden windfall can be easily mismanaged, often vanishing quickly rather than offering lasting security or opportunity**.**

A Better Way: Using a Trust

The good news is that this entire scenario can be avoided. By creating a trust, you retain control over who manages your child’s inheritance, when the funds are distributed, and how the money is used.

A trust allows your wishes—not the court’s—to shape your child’s financial future. It safeguards your family’s privacy, minimizes delays, and puts a framework in place to support responsible money management well into adulthood.

Protect Your Child’s Future with a Thoughtful Plan

At Rutkowski Law Firm, we help Michigan parents design estate plans that do more than distribute assets; they protect children, preserve control, and reflect family values.

Because providing for your children isn’t just about leaving them something, it’s about making sure it’s handled the right way.